Letters

Shanduka responds to water-use licences

Shanduka Group chief executive Phuti Mahanyele has responded to a M&G article regarding the company and its executive chairperson, Cyril Ramaphosa.

The Mail & Guardian report titled Molewa accused of meddling (November 9 2012) contains a number of allegations and inferences about Shanduka Group and its executive chairperson Cyril Ramaphosa.

The article refers to the water-use licences of mining operations managed by Shanduka Coal, a company in which Shanduka Group owns a 50.01% stake. The remaining 49.99% is owned by Glencore International.

It is necessary to correct certain inaccuracies and wrongful impressions created.

Firstly, Ramaphosa has never had a discussion with the minister of water and environmental affairs about water licences.
This was conveyed to the M&G prior to the publication of the article, but was not included in the article.

While no direct allegations against Ramaphosa are made, the overall impression created by the article and associated promotional material is that Ramaphosa improperly used political influence to benefit companies within the Shanduka Group. It would have been appropriate, therefore, to include Shanduka’s response on this matter in the article.

Secondly, claims that legal action was instituted against Shanduka Coal, and that the company was taken to court, are incorrect. This was stated to the M&G by Shanduka Coal's chief operating officer prior to publication. Again, this was not included in the article.

In fact, Shanduka Coal was issued with a directive by the department of water affairs in May 2012 to present its water-use licence or cease operations at the affected mines within two days. This does not constitute legal action.

To protect its position, the company indicated its intention to launch an urgent application to the high court to interdict the issuing of any pending directive, to review the unreasonable delay in making a decision on the licences, and to compel the department to take a decision within a time period determined by the court.

In its dealings with the department, the company maintained that it had provided all information necessary to facilitate consideration of its water use licences and had made every effort to fully comply with any and all requirements of the department to date.

Shanduka’s application was not heard in court, since the department offered an interim solution via the state attorney, which ultimately resulted in the matter being removed from the court roll. After consultation with the department, a timeline was agreed on the processing of the water use licences and they were subsequently processed and issued.

Thirdly, Shanduka Coal made every effort to fully comply with all requirements for the consideration of its water-use licences. The delay in the granting of these licences for a number of Shanduka Coal operations was the result of a backlog at the department of water affairs that affected mining companies across the country.

Since 2006, Shanduka Coal has been acquiring operations already in existence and, in each instance, embarked on a process to obtain the necessary water-use licences. The first licence applications had already been submitted by the previous owners, and Shanduka Coal continued with the process of updating and revising the water use applications in line with the department of water affairs’ guidelines.

The efforts by Shanduka Coal to provide all the necessary information and respond to all the issues raised by the department over several years in an effort to be issued with water-use licences are thoroughly documented.

Shanduka is fully supportive of government’s efforts to ensure responsible and sustainable water use, and will continue to make every effort to comply with all regulatory requirements at all its operations.